Sony Corp on Wednesday sharply deepened its net loss estimate and said it would not pay a dividend this fiscal year for the first time since it listed in 1958 after it was hit by a massive impairment charge for its struggling smartphone division.
The downward revision its the sixth under Chief Executive Kazuo Hirai, who took his post in 2012 promising to pull the firm's troubled electronics division into the black by focusing on its mobile, gaming and imaging units.
"This is the first time we've not paid a dividend and we feel that responsibility as management very heavily," Hirai told a news conference, adding that Sony would aim to start paying dividends again as soon as possible.
The Japanese consumer electronics company is now predicting a 230 billion yen ($2.15 billion) net loss for the year ending March 31, versus its previous forecast for a 50 billion yen loss. It expects an operating loss of 40 billion yen instead of a 140 billion yen profit flagged in July.
The move came after Sony was hit by a 180 billion yen ($1.7 billion) impairment charge for its struggling smartphone division.
Hirai said Sony had aimed to expand the mobile division but was now revising its strategy. He said Sony would cut 15 percent of the staff in its mobile unit in the current fiscal year ending in March 2015 as it focuses on achieving stable profits in the unit.
Still, he added that Sony would keep mobile as one of its three core electronics divisions.
The forecast revision is also an embarrassment for new Chief Financial Officer Kenichiro Yoshida, who assumed his post on April 1 promising the company would be more realistic about its outlook.
Yoshida had warned in July Sony could write down losses on its mobile unit for this business year. At the time Sony cut its profit outlook for its smartphone business to zero, but stuck to its full-year forecast.
In July Sony also cut its full-year sales forecast for its smartphones to 43 million from 50 million, which would mark a 10 percent increase on the year.
Sales of Sony's high-end Xperia mobile devices have suffered due to a lack of relationships with carriers in the crucial U.S. market where its smartphones are so far only available on No.4 carrier T-Mobile US, as well as in China, where local makers are dominant.
Shares of Sony closed down 1.8 percent before the announcement on Wednesday, versus a 0.5 percent fall in the broader market.
© Thomson Reuters 2014